Renter’s insurance is surprisingly affordable, with basic coverage costing about the same per month as one diner out! You can control the cost of renter’s insurance by choosing only the coverage you need. Remember, your landlord’s policy covers his investments, but not yours. So how can you get the coverage you need for the least amount of money?
Your credit score matters-
As with most insurance, your credit score is a huge factor in determining the rates you pay. People who are careful with their finances are careful in life generally, at least that’s how insurance companies see it. On the other hand, those who are careless in paying bills and honoring commitments may be careless in other areas of life as well. A good credit score most likely means lower premiums for your renter’s insurance.
Choose the best deductible-
The lower your deductible, the more your premiums will be. You can save on your monthly premiums by choosing a higher deductible. But if you have a loss, your out of pocket expenses will be greater. The whole matter of deductible is really a ‘pay now or pay later’ idea. Decide which works best for you, based on individual circumstances, savings, and the value of the items you are insuring.
Replacement or cash value coverage-
If you want the insurance company to replace your possessions after a loss, you will pay about 10% more. However, to save money on premiums, some people select cash value coverage. This means that the insurance company will pay for what the item is worth at the time of loss, figuring depreciation into the equation.
Look for multiple policy discounts-
If you have insurance on other items such as a car or motorcycle, consider getting renter’s insurance from the same company. Most will give you better rates on all policies the more you insure with them.
*If you are within five miles of a fire station or one thousand feet from a hydrant, expect lower rates. Be sure to mention that!
*Do you have a home security system? If you have installed security equipment to protect against burglary, expect a slight reduction in your rates.
*Do you have expensive items requiring additional coverage? If you need to insure precious items such as the family silver, fine art, furs or jewelry, you will have to pay more.
*Do you need add-ons such as flood or earthquake coverage? These are not part of a basic policy. If you live in an area of high risk, you might want to consider purchasing this extra coverage. If you see this as a low risk, you might skip it. Flood insurance is quite expensive.
If you are watching every penny, it is tempting to skip renter’s insurance. But do a quick estimate of the cost to replace all of your clothes, electronics, sports equipment, and furniture. Figure how much it would cost if you have to stay in a motel for several weeks if your apartment or condo became unlivable? Suddenly, renter’s insurance looks like the year’s best bargain.